TRANSPORTATION CODE CHAPTER 223. BIDS AND CONTRACTS … · CHAPTER 223. BIDS AND CONTRACTS FOR...

TRANSPORTATION CODE

TITLE 6. ROADWAYS

SUBTITLE B. STATE HIGHWAY SYSTEM

CHAPTER 223. BIDS AND CONTRACTS FOR HIGHWAY PROJECTS

SUBCHAPTER A. COMPETITIVE BIDS

Sec. 223.001.AACONTRACT REQUIRING COMPETITIVE BIDS.

(a)AAThis section applies only to a highway that is part of the

state highway system.

(b)AAThe department shall submit for competitive bids each

contract for:

(1)AAthe improvement of a highway;

(2)AAmaterials to be used in the construction or

maintenance of a highway; or

(3)AAtraffic control or safety devices to be used on a

highway.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by:

Acts 2019, 86th Leg., R.S., Ch. 431 (S.B. 1092), Sec. 1, eff.

June 4, 2019.

Sec. 223.002.AANOTICE OF BIDS.AA The department shall give

notice regarding the time and place at which bids on a contract will

be opened and the contract awarded.AAThe commission by rule shall

determine the most effective method for providing the notice

required by this section.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995. Amended

by Acts 1997, 75th Leg., ch. 165, Sec. 30.13(a), eff. Sept. 1, 1997.

Amended by:

Acts 2011, 82nd Leg., R.S., Ch. 1345 (S.B. 1420), Sec. 30,

eff. September 1, 2011.

Sec. 223.003.AANOTICE OF PROPOSED CONTRACTS. (a)AAA person

may apply to have the name of the person placed on a list to receive

notice of any proposed contracts.

(b)AAThe department shall send the notice to each person on

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that list.AAThe department may send the notice by mail or

electronically to an e-mail address designated by the person.

(c)AAThe department may require each applicant to pay an

annual subscription fee set by the department in an amount not to

exceed the average annual costs of sending notices to the

applicant.

(d)AAThe department shall deposit money received under this

section to the credit of the state highway fund.


by Acts 1997, 75th Leg., ch. 165, Sec. 30.13(b), eff. Sept. 1, 1997.

Amended by:


June 15, 2017.


June 15, 2017.

Sec.A223.004.AAFILING, OPENING, AND REJECTION OF BIDS. (a)

Except as provided by Section 223.005, a bid submitted under this

subchapter must be sealed and filed with the director or the

director’s designee in Austin and shall be opened at a public

meeting by the director or the director’s designee.

(b)AAAll bidders may attend the opening and all bids shall be

opened in their presence.

(c)AAThe commission by rule may prescribe conditions under

which a bid may be rejected by the department.


by Acts 1997, 75th Leg., ch. 165, Sec. 30.13(c), eff. Sept. 1, 1997.

Sec.A223.0041.AAAWARD OF CONTRACTS. (a) Except as provided

by Section 223.005, all bids received and not rejected by the

department shall be tabulated and forwarded to the commission.

(b)AAThe commission may accept or reject the bids. Except as

provided in Subsection (c), if the bids are accepted, the

commission shall award the contract to the lowest bidder, subject

to Section 223.045.

(c)AAFor a maintenance contract involving an amount less than

$300,000, if the lowest bidder withdraws its bid prior to contract

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award or fails to execute the contract, the director may recommend

to the commission that the contract be awarded to the second lowest

bidder.AAThe commission may award the maintenance contract to the

second lowest bidder if the second lowest bidder agrees to accept

the unit bid prices of the lowest bidder.AAThe commission shall

adopt rules governing the conditions under which the department

will allow the withdrawal of the bid of the lowest bidder and

consider awarding a maintenance contract to the second lowest

bidder.

Added by Acts 1999, 76th Leg., ch. 82, Sec. 1, eff. Aug. 30, 1999.

Amended by:

Acts 2005, 79th Leg., Ch. 809 (S.B. 573), Sec. 1, eff.

September 1, 2005.

Sec.A223.0042.AACONTRACT INFORMATION ON INTERNET WEBSITE.

The department shall make available on the department ’s Internet

website a listing describing each contract awarded by the

commission for a highway construction project. The listing must

include for each project:

(1)AAthe funding program source contract awardee,

including subcontractors and historically underutilized business

and disadvantaged business enterprise participants and percentage

of contract; and

(2)AAeach department transportation district in which

the contract will be performed.

Added by Acts 2001, 77th Leg., ch. 271, Sec. 1, eff. Sept. 1, 2001.

Sec.A223.005.AABIDS ON CONTRACTS INVOLVING LESS THAN

$300,000. (a) The commission by rule may allow bids on a contract

estimated by the department to involve an amount less than $300,000

to be filed with the district engineer at the headquarters for the

district in which the improvement is to be made and opened and read

at a public meeting held by the district engineer or the district

engineer’s designee.

(b)AAThe commission may delegate to the director or the

director’s designee the right to:

(1)AAaccept or reject bids received, subject to Section

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223.045; and

(2)AAaward a contract to the lowest bidder.


by Acts 1997, 75th Leg., ch. 165, Sec. 30.13(d), eff. Sept. 1, 1997;

Acts 1999, 76th Leg., ch. 82, Sec. 2, eff. Aug. 30, 1999.

Sec.A223.006.AACONTRACTOR’S BOND. A successful bidder under

this subchapter shall post a bond in an amount provided by law

conditioned on the faithful compliance with the bidder ’s bid and

performance of the contract and made payable to the department for

the use and benefit of the state highway fund.


Sec.A223.007.AACONTRACTS. (a) The commission shall

prescribe the form of the contract and may include any matter the

commission considers advantageous to the state.

(b)AAContract forms shall be uniform as near as possible.

(c)AAA contract must be:

(1)AAmade in the name of the state;

(2)AAsigned by the director or the director’s designee;

(3)AAapproved by at least two members of the commission

or a designee under Section 2103.064(a), Government Code; and

(4)AAsigned by the successful bidder.

(d)AAThe commission may delegate its authority under

Subsections (a) and (b) to the director, who may delegate the

delegated authority to an employee of the department who holds the

rank of division director or higher.


by Acts 1997, 75th Leg., ch. 165, Sec. 30.13(e), eff. Sept. 1, 1997.

Sec.A223.008.AANO LIABILITY IN EXCESS OF AVAILABLE FUNDS. A

contract may not be made under this subchapter that will create a

liability on the state in excess of funds available for that purpose

under Subchapter A, Chapter 222.


Sec. 223.009.AAPARTIAL PAYMENT. A contract may provide for

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partial payments to the contractor.


Amended by:

Acts 2007, 80th Leg., R.S., Ch. 313 (H.B. 2075), Sec. 1, eff.

June 15, 2007.

Sec.A223.010.AADEPOSIT AND INVESTMENT OF RETAINED AMOUNT.

(a) The department may retain up to five percent of the contract

price. The department may continue to retain the amount until the

entire improvement has been completed and accepted or release the

retained amount at any time before the improvement is accepted.

(b)AAAt the request of the contractor and with the approval

of the department and the comptroller, the amount retained may be

deposited under a trust agreement with a state or national bank that

has its main office or a branch office in this state and is selected

by the contractor.

(c)AAThe department shall provide a trust agreement that

protects the interests of the state.

(d)AAThe bank, acting as escrow agent and by instructions

from the contractor, may reinvest the retained amount in a

certificate of deposit issued by a state or national bank that has

its main office or a branch office in this state, bank time deposit,

or other similar investment prescribed by the trust agreement.

(e)AAInterest earned under the trust agreement shall be paid

to the contractor unless specified otherwise under the trust

agreement.

(f)AAThe escrow agent is responsible for all investments and

amounts resulting from the deposits of the retained amount until

released from that responsibility under the trust agreement.

(g)AAThe contractor shall pay all expenses incident to the

deposit and all charges made by the escrow agent for custody of the

securities and forwarding of interest on those securities. Those

expenses or charges may not apply to the contract or to the state.

(h)AARepealed by Acts 2007, 80th Leg., R.S., Ch. 313, Sec. 3,

eff. June 15, 2007.

(i)AARepealed by Acts 2007, 80th Leg., R.S., Ch. 313, Sec. 3,

eff. June 15, 2007.

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by Acts 1997, 75th Leg., ch. 1423, Sec. 18.01, eff. Sept. 1, 1997;

Acts 1999, 76th Leg., ch. 344, Sec. 5.014, eff. Sept. 1, 1999; Acts

1999, 76th Leg., ch. 902, Sec. 1, eff. June 18, 1999; Acts 1999,

76th Leg., ch. 1261, Sec. 1, eff. Sept. 1, 1999; Acts 2001, 77th

Leg., ch. 1420, Sec. 21.001(102), 21.002(19), eff. Sept. 1, 2001.

Amended by:


June 15, 2007.


June 15, 2007.

Sec. 223.012.AACONTRACTOR PERFORMANCE. (a)AAThe commission

shall adopt rules to:

(1)AAestablish a range of contract remedies to be

included in all low-bid highway improvement contracts, including

enforceable corrective action plans and criteria for prohibiting

contractors with significant project completion delays from

bidding on new projects, and develop a process and criteria for when

to apply each contract remedy;

(2)AAdevelop and implement a schedule for liquidated

damages that accurately reflects the costs associated with project

completion delays, including administrative and travel delays; and

(3)AAdevelop a contractor performance evaluation

process and an evaluation tool that:

(A)AAallows for theAAreview of contractor bidding

capacity to ensure that contractors meet each quality, safety, and

timeliness standard established by the commission; and

(B)AAcontains criteria for modifying a

contractor ’s bidding capacity for competitively bid highway

improvement contracts when appropriate.

(b)AAIn developing the rules required by Subsection (a)(1),

the commission must:

(1)AAconsult with industry contractors; and

(2)AAconsider contract remedies used by:

(A)AAother state agencies; and

(B)AAdepartments of transportation in other

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states.

(c)AAThe rules adopted under Subsection (a)(2) must:

(1)AAinclude criteria for identifying projects that

have a significant impact on the traveling public; and

(2)AArequire the department to calculate

project-specific liquidated damages for projects described by

Subdivision (1) that reflect the true cost of travel delays.

(d)AAIn developing the evaluation tool required by

Subsection (a)(3), the commission must consult with industry

contractors.

(e)AAThe rules adopted under Subsection (a)(3) must:

(1)AAprovide for a process for contractors to appeal

the contractors ’ evaluations; and

(2)AAinclude criteria for the use of the evaluations by

the department to address contractor performance problems.

(f)AARules adopted under this section must require:

(1)AAcontractual provisions providing for the

consideration of sufficient time; and

(2)AAthe department to consider any events outside a

contractor ’s control before assessing a penalty against the

contractor.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 1.22, eff. Sept. 1,

1997.

Amended by:


September 1, 2017.

Sec.A223.013.AAELECTRONIC BIDDING SYSTEM. (a) The

department may establish an electronic bidding system for highway

construction and maintenance contracts.

(b)AAThe system must permit a qualified vendor to

electronically submit a bid, including any contract, signature, or

verification of a guaranty check by a financial institution.

(c)AAThat part of Section 223.004(a) requiring a bid to be

opened at a public hearing of the commission does not apply to an

electronically submitted bid. A copy of each electronically

submitted bid shall be publicly posted within 48 hours after bids

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are opened.

(d)AAAfter the electronic bidding system is established, the

department shall take the actions necessary to recover the

department ’s costs of manually processing bids from a person who

does not submit an electronic bid.

Added by Acts 1997, 75th Leg., ch. 1171, Sec. 1.22, eff. Sept. 1,

1997.

Sec.A223.014.AABID GUARANTY. (a) The commission by rule

shall provide a method by which a bidder may submit a bid guaranty.

A rule may authorize the use of an electronic funds transfer, a

check, including an electronic check, a money order, an escrow

account, a trust account, a credit card issued by a financial

institution chartered by a state or the United States or by a

nationally recognized credit organization approved by the

department, or another method the commission determines to be

suitable. The department may require the payment of a discount or

service charge for the use of a credit card.

(b)AAThe department may establish one or more escrow accounts

in the state highway fund for the prepayment of bid guaranties. The

bid guaranties and any fees the department establishes to

administer this subsection shall be administered in accordance with

an agreement approved by the department. Notwithstanding any other

law and as specified in the agreement, any available accumulated

interest and other income earned on money in an escrow account shall

be paid to the bidder or credited to the escrow account.

(c)AAThe department shall deposit each administrative fee

and discount and service charge collected under this section to the

credit of the state highway fund.

(d)AAThe commission ’s rules may not prohibit a bidder from

submitting a bid guaranty by use of a cashier ’s check, money order,

or teller’s check.

Added by Acts 2001, 77th Leg., ch. 55, Sec. 1, eff. May 8, 2001.

Sec.A223.015.AADEPOSIT AND INVESTMENT OF BID GUARANTY. (a)

The department may authorize the use of a trust account for the

purpose of providing a required bid guaranty.

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(b)AAThe guaranty shall be deposited in accordance with a

trust agreement with a state or nationally chartered financial

institution that has its main office or a branch office in this

state and that is selected by the bidder.

(c)AAThe department shall prescribe a trust agreement that

protects the interests of this state.

(d)AAInterest earned under the trust agreement shall be paid

to the bidder unless specified otherwise in the trust agreement.

(e)AAThe applicable financial institution is responsible for

all amounts resulting from the deposit of the guaranty until

released from that responsibility in accordance with the trust

agreement.

(f)AAThe bidder shall pay all expenses incident to the

deposit and all charges imposed by the financial institution for

custody of the guaranties and forwarding of interest on a bid

guaranty. The expenses may not be included in the bid and are not

otherwise the responsibility of the state.

(g)AAOn the request of a bidder, the financial institution

may reinvest the guaranty amounts in a certificate of deposit or

another similar instrument prescribed by the trust agreement. The

certificate of deposit or other instrument must be issued by a state

or nationally chartered financial institution that has its main

office or a branch office in this state.

(h)AAOn request, the financial institution shall certify and

verify to the department the amount on deposit. The trust agreement

must specify the method for providing the required information.

Added by Acts 2001, 77th Leg., ch. 55, Sec. 1, eff. May 8, 2001.

Sec.A223.016.AAFORM OF PROPOSAL GUARANTY. If the department

by rule requires a proposal guaranty as a condition of bidding for a

contract, the guaranty may be in the form of:

(1)AAa cashier’s check or money order drawn on a

financial entity specified by the department; or

(2)AAa bid bond issued by a surety authorized to do

business in this state; or

(3)AAany other method determined to be suitable by the

department.

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Added by Acts 2001, 77th Leg., ch. 833, Sec. 1, eff. Jan. 1, 2002.

Renumbered from Transportation Code Sec. 223.014 by Acts 2003, 78th

Leg., ch. 1275, Sec. 2(126), eff. Sept. 1, 2003.

SUBCHAPTER B. CONTRACT PROVISIONS

Sec.A223.041.AAENGINEERING AND DESIGN CONTRACTS. (a) The

department shall use private sector engineering-related services

to assist in accomplishing its activities in providing

transportation projects. For the purpose of this section,

engineering-related services means engineering, land surveying,

environmental, transportation feasibility and financial,

architectural, real estate appraisal, and materials laboratory

services. These engineering-related services are for highway

improvements, right-of-way acquisition, and aviation improvements.

(b)AAThe department, in setting a minimum level of

expenditures in these engineering-related activities that will be

paid to the private sector providers, shall provide that the

expenditure level for a state fiscal year in all strategies paid to

private sector providers for all department engineering-related

services for transportation projects is not less than 35 percent of

the total funds appropriated in Strategy

A.1.1.AAPlan/Design/Manage and Strategy A.1.2. of the General

Appropriations Act for that state fiscal biennium.AAThe department

shall attempt to make expenditures for engineering-related

services with private sector providers under this subsection with

historically underutilized businesses, as defined by Section

2161.001, Government Code, in an amount consistent with the

applicable provisions of the Government Code, any applicable state

disparity study, and in accordance with the good-faith-effort

procedures outlined in the rules adopted by the comptroller.


by Acts 1997, 75th Leg., ch. 1122, Sec. 16, eff. Sept. 1, 1997; Acts

1997, 75th Leg., ch. 1171, Sec. 1.23, eff. Sept. 1, 1997.

Amended by:

Acts 2005, 79th Leg., Ch. 281 (H.B. 2702), Sec. 2.20, eff.

June 14, 2005.

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Acts 2007, 80th Leg., R.S., Ch. 937 (H.B. 3560), Sec. 1.112,


Sec. 223.042.AAPRIVATIZATION OF MAINTENANCE CONTRACTS. (a)

Of the amount spent in a fiscal year by the department for

maintenance projects, the department shall spend not less than 50

percent through contracts awarded by competitive bids.

(b)AAMoney spent for maintenance projects to which this

section does not apply is included when computing the amount of

expenditures for maintenance projects in a fiscal year.

(c)AAThe department may award a contract under this section

as a purchase of service under Subtitle D, Title 10, Government

Code, if the department:

(1)AAestimates that the contract will involve an amount

for which a formal solicitation process for the purchase of

services is not required under rules relating to the delegation of

purchasing authority to state agencies adopted by the comptroller

under Subchapter C, Chapter 2155, Government Code; and

(2)AAdetermines that the competitive bidding procedure

in this chapter is not practical.

(d)AAThe department shall consider all of its direct and

indirect costs in determining the cost of providing the services.

(e)AASubsection (a) does not apply unless the department

determines that a function of comparable quality and quantity can

be purchased or performed at a savings by using private sector

contracts.

(f)AAThe department shall file a report with the Legislative

Budget Board on September 1 of each fiscal year detailing the

contracts awarded by the department under this section during the

previous fiscal year.

(g)AAThe commission shall adopt rules to administer this

section.

(h)AAIn this section, "maintenance project" means any

routine or preventive maintenance activity. The term includes

mowing, concrete removal and replacement, illumination

maintenance, guardrail repair, fence repair, litter pick-up,

herbicide spraying, pothole repair, silt and erosion control or

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repair, sign installation, highway overlaying, paint and bead

striping, rest area maintenance, and installation of raised

pavement markings.

(i)AAThis section does not apply to the purchase

ofAAmaterials for maintenance projects.

(j)AAAs an alternative to the requirements of Sections

2253.021(b) and (c), Government Code, the department may require

that a performance or payment bond under a contract awarded under

this section for a maintenance project:

(1)AAbe in an amount equal to the greatest

annualAAamount to be paid the contractor under the contract and

remain in effect for one year from the day work is resumed after any

default by the contractor; or

(2)AAbe in an amount equal to the amount to be paid the

contractor during the term of the bond and be for a term of two

years, renewable annually in two-year increments.

(k)AAA claim against a performance or payment bond issued

under this section must be filed against the bond in effect on the

date the basis for the claim arose.


by Acts 1997, 75th Leg., ch. 165, Sec. 17.19, eff. Sept. 1, 1997;

Acts 2003, 78th Leg., ch. 28, Sec. 1, eff. May 12, 2003; Acts 2003,

78th Leg., ch. 274, Sec. 1, eff. June 18, 2003.

Reenacted and amended by Acts 2005, 79th Leg., Ch. 638 (H.B. 2659),

Sec. 1, eff. June 17, 2005; Acts 2005 79th Leg., Ch 728, Sec.

20.002, eff. September 1, 2005.

Amended by:

Acts 2011, 82nd Leg., R.S., Ch. 849 (H.B. 3730), Sec. 1, eff.

June 17, 2011.


September 1, 2017.

Sec.A223.043.AACITIZEN’S PREFERENCE IN EMPLOYMENT. In a

contract for the construction, maintenance, or improvement of a

designated state highway, the department may require that a citizen

of the United States and of the county in which construction,

maintenance, or improvement of the highway is being proposed shall

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be given preference in employment to perform manual labor.


Sec.A223.044.AAINMATE LABOR OR LABOR OF PERSONS PLACED ON

COMMUNITY SUPERVISION FOR IMPROVEMENT PROJECTS. (a) The

commission may authorize the department to contract with a criminal

justice agency or a private correctional facility for the provision

of inmate labor or the labor of persons placed on community

supervision for a state highway system improvement project.

(b)AAA contract with a criminal justice agency must be made

in conformity with Chapter 771, Government Code.

(c)AAIn this section, "criminal justice agency" includes:

(1)AAthe Texas Department of Criminal Justice;

(2)AAa community supervision and corrections

department established under Chapter 76, Government Code; and

(3)AAa sheriff’s department operating:

(A)AAa county farm or workhouse established under

Article 43.10, Code of Criminal Procedure; or

(B)AAa county correctional center established

under Section 351.181, Local Government Code.

(d)AAA contract with a private correctional facility under

this section may not provide for the transfer of public funds to the

private correctional facility for the use of inmate labor.

(e)AAThe commission may authorize the department to contract

with the Texas Department of Criminal Justice for the provision of

inmate labor or the labor of persons placed on community

supervision for a brush control project, as defined by Section

203.001, Agriculture Code, on an area located on or adjacent to a

state highway system improvement project.

(f)AAThe State Soil and Water Conservation Board may also

enter into a contract with the Texas Department of Criminal Justice

for the provision of inmate labor or the labor of persons placed on

community supervision to perform a brush control project described

by Subsection (e) or under Chapter 203, Agriculture Code.


by Acts 1997, 75th Leg., ch. 795, Sec. 1, eff. June 17, 1997; Acts

1999, 76th Leg., ch. 484, Sec. 1 to 4, eff. Aug. 30, 1999.

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Sec. 223.045.AAIRON AND STEEL PREFERENCE PROVISIONS IN

IMPROVEMENT CONTRACTS.AAA contract awarded by the department for

the improvement of the state highway system without federal aid

must contain the same preference provisions for iron and steel and

iron and steel products that are required under federal law for an

improvement made with federal aid.


Amended by:


September 1, 2017.

Sec.A223.046.AAUSE OF FLY ASH AND BOTTOM ASH FOR ROAD

CONSTRUCTION. Design standards, guidelines, and specifications of

the department, a county, or a municipality shall require that

contract specifications for a road construction project allow for

the use of fly ash and bottom ash resulting from combustion of coal

or other fossil fuels and used for paving, bridge construction, and

other appropriate road construction unless that use is technically

inappropriate according to sound engineering principles or

increases the cost of that construction.


Sec.A223.047.AAPREFERENCE FOR RUBBERIZED ASPHALT PAVING MADE

FROM SCRAP TIRES. (a) If the department, a county, or a

municipality uses rubberized asphalt paving, the department,

county, or municipality shall use scrap tires converted to

rubberized asphalt paving by a facility in this state if available.

(b)AAIn comparing bids submitted for road construction that

require paving, the department, a county, or a municipality may

give a preference to a bid that provides for using, as a part of the

paving material, rubberized asphalt paving described by Subsection

(a) if the cost of that paving material does not exceed by more than

15 percent the bid cost of alternative paving materials for the same

job. The cost of the materials must be determined by a life-cycle

cost benefit analysis.

(c)AAIn this section:

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(1)AA"Rubberized asphalt" means an asphalt material

containing at least 15 percent by weight of a reacted whole scrap

tire.

(2)AA"Scrap tire" means a tire that can no longer be

used for its original intended purpose.


Sec.A223.048.AATIME OF PAYMENT. The department may not pay a

contractor for highway improvement, construction, or maintenance

before the 10th day of the month after the month in which the work is

performed or the material is used. The department shall make

payment as soon after that date as is practical.


Sec. 223.049.AACONTRACT WITH LAND OWNER FOR IMPROVING ACCESS

TO LAND. (a) The department may, without complying with the

competitive bidding procedures of Subchapter A, contract with an

owner of land, including a subdivision, adjacent to a highway that

is part of the state highway system to construct an improvement on

the highway right-of-way that is directly related to improving

access to or from the owner’s land.

(b)AAAn owner that enters into a contract with the department

under this section must:

(1)AAcomply with applicable department design and

construction standards;

(2)AAcomply with all laws, rules, regulations, and

ordinances, including environmental requirements, that would be

applicable if the department were performing the work;

(3)AAexecute a performance and payment bond in

accordance with Chapter 2253, Government Code; and

(4)AAmake available for inspection by the department

all books and other records in the possession of the owner that are

related to the project.

(c)AAState and federal funds may not be used for the design,

development, financing, or construction of a highway improvement

under a contract described by this section.

Added by Acts 2011, 82nd Leg., R.S., Ch. 1129 (H.B. 628), Sec. 2.13,

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Sec. 223.050.AAPREFERENCE FOR CERTAIN PROVIDERS.

(a)AAExcept as provided by Subsection (d), in awarding a contract

to a private sector provider, the department shall give preference

to a private sector provider if:

(1)AAthe preference serves to create a positive

economic impact on job growth and job retention in this state;

(2)AAthe transportation project for which the contract

is being awarded is funded entirely from:

(A)AAstate funds;

(B)AAlocal funds; or

(C)AAa combination of state and local funds; and

(3)AAthe amount of the bid or proposal of the provider

does not exceed an amount equal to 105 percent of the lowest bid or

proposal received by the department for the transportation project.

(b)AAThe department, in determining whether the preference

under Subsection (a) serves to create a positive economic impact on

job growth and job retention in this state, may consider a private

sector provider’s employment presence and business establishments

in this state.

(c)AAThis section does not apply to the procurement of

professional services under Subchapter A, Chapter 2254, Government

Code.

(d)AAThe department may not give a preference under this

section if:

(1)AAas a result of the preference, a private sector

provider would not be awarded a contract; and

(2)AAthe principal place of business of the private

sector provider described by Subdivision (1) is located in a state

that:

(A)AAborders this state; and

(B)AAdoes not give a preference to private sector

providers in a manner similar to this section.

Added by Acts 2013, 83rd Leg., R.S., Ch. 1404 (H.B. 3648), Sec. 3,

eff. June 14, 2013.

16



Sec. 223.051.AAVERIFICATION BY CONTRACTORS. (a)AAIn this

section, "E-verify program" has the meaning assigned by Section

673.001, Government Code.

(b)AAThe department may not award a contract for the

construction, maintenance, or improvement of a highway in this

state to a contractor unless the contractor and any subcontractor

register with and participate in the E-verify program to verify

employee information.AAThe contractor and any subcontractor must

continue to participate in the program during the term of the

contract.

(c)AAThe department shall develop procedures for the

administration and enforcement of this section.

Added by Acts 2017, 85th Leg., R.S., Ch. 533 (S.B. 312), Sec. 24,


Sec. 223.052.AANOTIFICATION BY CERTAIN MUNICIPALITIES OF

SCHEDULED EVENT. (a)AAThis section applies only to a municipality

that:

(1)AAis partially located in three counties, two of

which have a population of 1.8 million or more;

(2)AAis primarily located in a county with a population

of 1.8 million or more; and

(3)AAhas within its boundaries all or part of an

international airport operated jointly by two municipalities.

(b)AAA contract for an improvement to a segment of the state

highway system must prohibit a contractor from temporarily closing

the highway, including temporarily relocating or changing an

entrance or exit ramp to or from the highway, on the date that an

event is scheduled to be held in a municipality in which the

improvement is being proposed if, not later than 180 days before the

date the event is scheduled to be held, the municipality notifies

the department and the contractor of the date.

Added by Acts 2017, 85th Leg., R.S., Ch. 1155 (S.B. 82), Sec. 1,


Redesignated from Transportation Code, Section 223.051 by Acts

2019, 86th Leg., R.S., Ch. 467 (H.B. 4170), Sec. 21.001(45), eff.

September 1, 2019.

17






SUBCHAPTER C. EXPEDITED HIGHWAY IMPROVEMENT CONTRACTS

Sec.A223.101.AADEFINITIONS. In this subchapter:

(1)AA"Highway emergency" means a situation or condition

of a designated state highway that:

(A)AAposes an imminent threat to life or property

of travelers; or

(B)AAsubstantially disrupts the orderly flow of

traffic and commerce.

(2)AA"Highway improvement contract" means a contract

awarded by the department for the construction, repair, or

maintenance of a designated state highway or any part of that

highway.


Sec.A223.102.AAAWARD OF EMERGENCY HIGHWAY IMPROVEMENT

CONTRACT. As an alternative to the procedure provided by

Subchapter A, in a highway emergency the department may award a

highway improvement contract in accordance with rules adopted by

the commission, which may include:

(1)AAcontractor eligibility;

(2)AAnotification of prospective bidders;

(3)AAbidding requirements;

(4)AAprocedures for awarding the contract;

(5)AAbonding or other requirements to ensure

satisfactory performance by the contractor and the protection of

claimants supplying labor and materials used in performance;

(6)AAcontract form and content; and

(7)AAprovision for a waiver of or exception to a

procedure or requirement adopted under this section.


Sec.A223.103.AACERTIFICATION OF EMERGENCY. (a) Before

awarding a contract under this subchapter, the director or a person

the director designates must certify in writing a description of

the highway emergency.

18

(b)AAA person designated under Subsection (a) may not occupy

a position below the level of deputy director.


Sec.A223.104.AACONTRACT REQUIREMENTS. (a) A contract

awarded under this subchapter must:

(1)AAbe in the name of the state;

(2)AAbe signed by the director or a person the director

designates; and

(3)AAhave attached a copy of the certification required

by Section 223.103.

(b)AAA person designated under Subsection (a) may not occupy

a position below the level of district engineer.


Sec.A223.105.AANOTIFICATION OF COMMISSION. Not later than

the fifth working day after the date on which the contract is

awarded, the director shall notify in writing each member of the

commission of the details of the highway emergency and the award of

the contract.


SUBCHAPTER D. CONTRACTS FOR ENVIRONMENTAL OR CULTURAL ASSESSMENT

Sec. 223.151.AAAPPLICABILITY.AAThis subchapter:

(1)AAapplies to services of a technical expert,

including an archeologist, biologist, geologist, or historian, to

conduct an environmental or cultural assessment required by state

or federal law for a transportation project under the authority or

jurisdiction of the department; and

(2)AAdoes not apply to services defined as engineering

by the Texas Board of Professional Engineers and Land Surveyors

under Chapter 1001, Occupations Code.

Added by Acts 1997, 75th Leg., ch. 165, Sec. 30.15(a), eff. Sept. 1,

1997. Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 14A.820, eff.

Sept. 1, 2003.

Amended by:

19


http://www.statutes.legis.state.tx.us/GetStatute.aspx?Code=OC&Value=1001

Acts 2019, 86th Leg., R.S., Ch. 1232 (H.B. 1523), Sec. 2.14,


Sec.A223.152.AADETERMINATION BY DEPARTMENT. The department

may use competitive sealed proposals to obtain services under this

subchapter if the department determines that competitive sealed

bidding or informal competitive bidding is:

(1)AAnot practical; or

(2)AAdisadvantageous to the state.


1997.

Sec.A223.153.AASOLICITATION OF PROPOSALS. The department

shall solicit proposals under this subchapter using the procedure

by which the department procures services under Subchapter A,

Chapter 2254, Government Code.


1997.

Sec.A223.154.AAOPENING OF PROPOSALS; DISCLOSURE OF

INFORMATION. (a) The department:

(1)AAshall open each proposal received under this

subchapter so as to avoid disclosure of contents to competing

offerors during the process of negotiation; and

(2)AAmay not disclose any information to an offeror

that is derived from a proposal received from another offeror.

(b)AAAfter the award of a contract under this subchapter,

each proposal submitted to the department is open for public

inspection, except as provided by Chapter 552, Government Code.


1997.

Sec.A223.155.AADISCUSSIONS WITH OFFERORS. (a) As provided

in a request for proposals and under rules adopted by the

commission, the department may discuss an acceptable or potentially

acceptable proposal with the offeror to assess that offeror ’s

ability to meet each requirement of the solicitation.

20




(b)AATo obtain the best final offer, before the department

awards a contract under this subchapter, the department may permit

an offeror to revise the offeror’s proposal.

(c)AAThe department shall provide each offeror an equal

opportunity to discuss and revise the offeror’s proposal.


1997.

Sec.A223.156.AAAWARD OF CONTRACT. (a) Except as provided by

Subsection (c), the department shall make a written award of a

contract under this subchapter to the offeror whose proposal is the

most advantageous to the state, considering price and the

evaluation factors in the request for proposals.

(b)AAThe contract file must state in writing the basis on

which the award is made.

(c)AAIf the department finds that none of the proposals is

acceptable, the department shall reject all proposals.


1997.

Sec.A223.157.AARULES. The department may adopt rules to

implement this subchapter.


1997.

SUBCHAPTER E. COMPREHENSIVE DEVELOPMENT AGREEMENTS

Sec. 223.201.AAAUTHORITY. (a)AASubject to Section 223.202,

the department may enter into a comprehensive development agreement

with a private entity to design, develop, finance, construct,

maintain, repair, operate, extend, or expand a:

(1)AAtoll project;

(2)AAstate highway improvement project that includes

both tolled and nontolled lanes and may include nontolled

appurtenant facilities;

(3)AAstate highway improvement project in which the

private entity has an interest in the project;

21


(4)AAstate highway improvement project financed wholly

or partly with the proceeds of private activity bonds, as defined by

Section 141(a), Internal Revenue Code of 1986; or

(5)AAnontolled state highway improvement project

authorized by the legislature.

(b)AAIn this subchapter, "comprehensive development

agreement" means an agreement that, at a minimum, provides for the

design and construction, reconstruction, rehabilitation,

expansion, or improvement of a project described in Subsection (a)

and may also provide for the financing, acquisition, maintenance,

or operation of a project described in Subsection (a).

(c)AAThe department may negotiate provisions relating to

professional and consulting services provided in connection with a

comprehensive development agreement.

(d)AAMoney disbursed by the department under a comprehensive

development agreement is not included in the amount:

(1)AArequired to be spent in a state fiscal biennium for

engineering and design contracts under Section 223.041; or

(2)AAappropriated in Strategy A.1.1.

Plan/Design/Manage of the General Appropriations Act for that

biennium for the purpose of making the computation under Section

223.041.

(e)AAThe department may authorize the investment of public

and private money, including debt and equity participation, to

finance a function described by this section.

(f)AAThe department may enter into a comprehensive

development agreement only for all or part of:

(1)AAthe State Highway 99 (Grand Parkway) project;

(2)AAthe Interstate Highway 35E managed lanes project

in Dallas and Denton Counties from Interstate Highway 635 to U.S.

Highway 380;

(3)AAthe Interstate Highway 35W project in Tarrant

County from Interstate Highway 30 to State Highway 114;

(4)AAthe State Highway 183 managed lanes project in

Tarrant and Dallas Counties from State Highway 121 to Interstate

Highway 35E;

(5)AAthe Interstate Highway 35E/U.S. Highway 67

22



Southern Gateway project in Dallas County, including:

(A)AAInterstate Highway 35E from 8th Street to

Interstate Highway 20; and

(B)AAU.S. Highway 67 from Interstate Highway 35E

to Farm-to-Market Road 1382 (Belt Line Road);

(6)AAthe State Highway 288 project from U.S. Highway 59

to south of State Highway 6 in Brazoria County and Harris County;

(7)AAthe U.S. Highway 290 managed lanes project in

Harris County from Interstate Highway 610 to State Highway 99;

(8)AAthe Interstate Highway 820 project from State

Highway 183 to Randol Mill Road;

(9)AAthe State Highway 114 project in Dallas County

from State Highway 121 to State Highway 183;

(10)AAthe Loop 12 project in Dallas County from State

Highway 183 to Interstate Highway 35E;

(11)AAthe Loop 9 project in Dallas and Ellis Counties

from Interstate Highway 20 to U.S. Highway 67; and

(12)AAthe U.S. Highway 181 Harbor Bridge project in

Nueces County between U.S. Highway 181 at Beach Avenue and

Interstate Highway 37.

(g)AAThe department may combine in a comprehensive

development agreement under this subchapter:

(1)AAa toll project and a rail facility as defined by

Section 91.001; or

(2)AAtwo or more projects described by Subsection (f).

(h)AARepealed by Acts 2011, 82nd Leg., R.S., Ch. 1345, Sec.

99, eff. June 17, 2011.

(i)AAThe authority to enter into a comprehensive development

agreement expires:

(1)AAAugust 31, 2017, for a project described by

Subsection (f), other than the State Highway 99 (Grand Parkway)

project and the State Highway 183 managed lanes project; and

(2)AAAugust 31, 2015, for the State Highway 183 managed

lanes project.

(j)AABefore the department may enter into a comprehensive

development agreement under Subsection (f), the department must:

(1)AAfor a project other than the State Highway 99

23


(Grand Parkway) project, obtain, not later than August 31, 2017,

the appropriate environmental clearance:

(A)AAfor the project; or

(B)AAfor the initial or base scope of the project

if the project agreement provides for the phased construction of

the project; and

(2)AApresent to the commission a full financial plan

for the project, including costing methodology and cost proposals.

(k)AANot later than December 1, 2014, the department shall

provide a report to the commission on the status of a project

described by Subsection (f).AAThe report must include:

(1)AAthe status of the project’s environmental

clearance;

(2)AAan explanation of any project delays; and

(3)AAif the procurement is not completed, the

anticipated date for the completion of the procurement.

(l)AAIn this section, "environmental clearance" means:

(1)AAa finding of no significant impact has been issued

for the project or, as applicable, for the initial or base scope of

the project; or

(2)AAfor a project for which an environmental impact

statement is prepared, a record of decision has been issued for that

project or, as applicable, for the initial or base scope of the

project.

(m)AAThe department may not develop a project under this

section as a project under Chapter 227.

Added by Acts 2005, 79th Leg., Ch. 281 (H.B. 2702), Sec. 2.21, eff.

June 14, 2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 264 (S.B. 792), Sec. 4.01,

eff. June 11, 2007.


June 17, 2011.


eff. June 17, 2011.


eff. June 17, 2011.

24






Acts 2013, 83rd Leg., R.S., Ch. 1234 (S.B. 1730), Sec. 1, eff.

September 1, 2013.

Sec. 223.2011.AALIMITED AUTHORITY FOR CERTAIN PROJECTS USING

COMPREHENSIVE DEVELOPMENT AGREEMENTS. (a)AANotwithstanding

Sections 223.201(f) and 370.305(c), the department or an authority

under Section 370.003 may enter into a comprehensive development

agreement relating to improvements to, or construction of, all or

part of:

(1)AAthe Loop 1 (MoPac Improvement) project from

Farm-to-Market Road 734 to Cesar Chavez Street;

(2)AAthe U.S. 183 (Bergstrom Expressway) project from

Springdale Road to Patton Avenue;

(3)AAa project consisting of the construction of:

(A)AAthe Outer Parkway Project in Cameron County

from U.S. Highway 77 to Farm-to-Market Road 1847; and

(B)AAthe South Padre Island Second Access Causeway

Project from State Highway 100 to Park Road 100;

(4)AAthe Loop 49 project from Interstate 20 to U.S.

Highway 69 (Lindale Relief Route) and from State Highway 110 to U.S.

Highway 259 (Segments 6 and 7);

(5)AAthe Loop 375 Border Highway West project in El Paso

County from Race Track Drive to U.S. Highway 54;

(6)AAthe Northeast Parkway project in El Paso County

from Loop 375 east of the Railroad Drive overpass to the Texas-New

Mexico border;

(7)AAthe Loop 1604 project in Bexar County;

(8)AAthe Hidalgo County Loop project; and

(9)AAthe International Bridge Trade Corridor project.

(b)AABefore the department or an authority may enter into a

comprehensive development agreement under this section, the

department or the authority, as applicable, must meet the

requirements under Section 223.201(j).

(c)AANot later than December 1, 2014, the department or the

authority, as applicable, shall provide a report to the commission

on the status of a project described by Subsection (a).AAThe report

must include:

25






(1)AAthe status of the project’s environmental

clearance;

(2)AAan explanation of any project delays; and

(3)AAif the procurement is not completed, the

anticipated date for the completion of the procurement.

(d)AAThe department may not provide any financial assistance

to an authority to pay for the costs of procuring an agreement under

this section.

(e)AAIn this section, "environmental clearance" means:

(1)AAa finding of no significant impact has been issued

for the project or, as applicable, for the initial or base scope of

the project; or

(2)AAfor a project for which an environmental impact

statement is prepared, a record of decision has been issued for that

project or, as applicable, for the initial or base scope of the

project.

(f)AAThe authority to enter into a comprehensive development

agreement under this section expires August 31, 2017.

Added by Acts 2011, 82nd Leg., R.S., Ch. 1345 (S.B. 1420), Sec. 32,

eff. June 17, 2011.

Amended by:

Acts 2013, 83rd Leg., R.S., Ch. 1234 (S.B. 1730), Sec. 2, eff.

September 1, 2013.

Sec. 223.2012.AANORTH TARRANT EXPRESS PROJECT PROVISIONS.

(a)AAIn this section, the North Tarrant Express project is the

project described by Section 223.201(f)(3) entered into on June 23,

2009.

(b)AAThe comprehensive development agreement for the North

Tarrant Express project may provide for negotiating and entering

into facility agreements for future phases or segments of the

project at the times that the department considers advantageous to

the department.

(c)AAThe department is not required to use any further

competitive procurement process to enter into one or more related

facility agreements with the developer or an entity controlled by,

to be controlled by, or to be under common control with the

26




developer under the comprehensive development agreement for the

North Tarrant Express project.

(d)AAA facility agreement for the North Tarrant Express

project must terminate on or before June 22, 2061.AAA facility

agreement may not be extended or renewed beyond that date.

(e)AAThe department may include or negotiate any matter in a

comprehensive development agreement for the North Tarrant Express

project that the department considers advantageous to the

department.

(f)AAThe comprehensive development agreement for the North

Tarrant Express project may provide the developer or an entity

controlled by, to be controlled by, or to be under common control

with the developer with a right of first negotiation under which the

developer may elect to negotiate with the department and enter into

one or more related facility agreements for future phases or

segments of the project.


eff. June 17, 2011.

Sec. 223.2013.AANO EFFECT ON DEPARTMENT OBLIGATIONS.AAAny

authority for the department to enter into a comprehensive

development agreement relating to improvements to Grand Parkway

(State Highway 99) does not affect the obligation of the department

to comply with the applicable requirements of an agreement entered

into under Section 228.0111 in connection with the Grand Parkway

project, including complying with the terms and conditions for the

development, construction, and operation of the Grand Parkway that

are prescribed in such an agreement.


eff. June 17, 2011.

Redesignated from Transportation Code, Section 223.2012 by Acts

2013, 83rd Leg., R.S., Ch. 161 (S.B. 1093), Sec. 22.001(44), eff.

September 1, 2013.

Sec. 223.202.AALIMITATION ON DEPARTMENT FINANCIAL

PARTICIPATION. The amount of money disbursed by the department

from the state highway fund and the Texas mobility fund during a

27





federal fiscal year to pay the costs under comprehensive

development agreements may not exceed 40 percent of the obligation

authority under the federal-aid highway program that is distributed

to this state for that fiscal year.


June 14, 2005.

Sec. 223.203.AAPROCESS FOR ENTERING INTO COMPREHENSIVE

DEVELOPMENT AGREEMENTS. (a) If the department enters into a

comprehensive development agreement, the department shall use a

competitive procurement process that provides the best value for

the department.AAThe department may accept unsolicited proposals

for a proposed project or solicit proposals in accordance with this

section.

(b)AAThe department shall establish rules and procedures for

accepting unsolicited proposals that require the private entity to

include in the proposal:

(1)AAinformation regarding the proposed project

location, scope, and limits;

(2)AAinformation regarding the private entity’s

qualifications, experience, technical competence, and capability

to develop the project; and

(3)AAany other information the department considers

relevant or necessary.

(c)AAThe department shall publish a notice advertising a

request for competing proposals and qualifications in the Texas

Register that includes the criteria to be used to evaluate the

proposals, the relative weight given to the criteria, and a

deadline by which proposals must be received if:

(1)AAthe department decides to issue a request for

qualifications for a proposed project; or

(2)AAthe department authorizes the further evaluation

of an unsolicited proposal.

(d)AAA proposal submitted in response to a request published

under Subsection (c) must contain, at a minimum, the information

required by Subsections (b)(2) and (3).

(e)AAThe department may interview a private entity

28


submitting an unsolicited proposal or responding to a request under

Subsection (c).AAThe department shall evaluate each proposal based

on the criteria described in the request for competing proposals

and qualifications and may qualify or shortlist private entities to

submit detailed proposals under Subsection (f).AAThe department

must qualify or shortlist at least two private entities to submit

detailed proposals for a project under Subsection (f) unless the

department does not receive more than one proposal or one response

to a request under Subsection (c).

(e-1)AANotwithstanding the requirements of this section, the

department may prequalify a private entity to submit a detailed

proposal to provide services under a design-build contract.AAThe

department is not required to publish a request under Subsection

(c) for a design-build contract, and may enter into a design-build

contract based solely on an evaluation of detailed proposals

submitted in response to a request under Subsection (f) by

prequalified private entities.AAThe commission shall adopt rules

establishing criteria for the prequalification of a private entity

that include the precertification requirements applicable to

providers of engineering services and the qualification

requirements for bidders on highway construction contracts.AARules

for design-build projects adopted pursuant to this subsection shall

also provide for an expedited selection process that includes

design innovation as a selection criterion.

(e-2)AAIn this section, "design-build contract" means a

comprehensive development agreement that includes the design and

construction of a turnpike project, does not include the financing

of a turnpike project, and may include the acquisition,

maintenance, or operation of a turnpike project.

(f)AAThe department shall issue a request for detailed

proposals from all private entities qualified or shortlisted under

Subsection (e) or prequalified under Subsection (e-1) if the

department proceeds with the further evaluation of a proposed

project.AAA request under this subsection may require additional

information relating to:

(1)AAthe private entity’s qualifications and

demonstrated technical competence;

29

(2)AAthe feasibility of developing the project as

proposed;

(3)AAengineering or architectural designs;

(4)AAthe private entity’s ability to meet schedules;

(5)AAa financial plan, including costing methodology

and cost proposals; or

(6)AAany other information the department considers

relevant or necessary.

(f-1)AAA private entity responding to a request for detailed

proposals issued under Subsection (f) may submit alternative

proposals based on comprehensive development agreements having

different terms, with the alternative terms in multiples of 10

years, ranging from 10 years from the later of the date of final

acceptance of the project or the start of revenue operations by the

private entity to 50 years from the later of the date of final

acceptance of the project or the start of revenue operations by the

private entity, not to exceed a total term of 52 years or any lesser

term provided in a comprehensive development agreement.

(f-2)AAA private entity responding to a request for detailed

proposals issued under Subsection (f) must identify:

(1)AAcompanies that will fill key project roles,

including project management, lead design firm, quality control

management, and quality assurance management; and

(2)AAentities that will serve as key task leaders for

geotechnical, hydraulics and hydrology, structural, environmental,

utility, and right-of-way issues.

(g)AAIn issuing a request for detailed proposals under

Subsection (f), the department may solicit input from entities

qualified under Subsection (e) or any other person.AAThe department

may also solicit input regarding alternative technical concepts

after issuing a request under Subsection (f).AAA technical solution

presented with a proposal must be fully responsive to, and have

demonstrated resources to be able to fulfill, all technical

requirements for the project, including specified quality

assurance and quality control program requirements, safety program

requirements, and environmental program requirements.AAA proposal

that includes a technical solution that does not meet those

30

requirements is ineligible for further consideration.

(h)AAThe department shall evaluate each proposal based on the

criteria described in the request for detailed proposals and select

the private entity whose proposal offers the apparent best value to

the department.

(i)AAThe department may enter into negotiations with the

private entity whose proposal offers the apparent best value.

(j)AAIf at any point in negotiations under Subsection (i) it

appears to the department that the highest ranking proposal will

not provide the department with the overall best value, the

department may enter into negotiations with the private entity

submitting the next highest ranking proposal.

(k)AAThe department may withdraw a request for competing

proposals and qualifications or a request for detailed proposals at

any time.AAThe department may then publish a new request for

competing proposals and qualifications.

(l)AAThe department may require that an unsolicited proposal

be accompanied by a nonrefundable fee sufficient to cover all or

part of its cost to review the proposal.

(l-1)AAA private entity selected for a comprehensive

development agreement may not make changes to the companies or

entities identified under Subsection (f-2) unless the original

company or entity:

(1)AAis no longer in business, is unable to fulfill its

legal, financial, or business obligations, or can no longer meet

the terms of the teaming agreement with the private entity;

(2)AAvoluntarily removes itself from the team;

(3)AAfails to provide a sufficient number of qualified

personnel to fulfill the duties identified during the proposal

stage; or

(4)AAfails to negotiate in good faith in a timely manner

in accordance with provisions established in the teaming agreement

proposed for the project.

(l-2)AAIf the private entity makes team changes in violation

of Subsection (l-1), any cost savings resulting from the change

accrue to the state and not to the private entity.

(m)AAThe department may pay an unsuccessful private entity

31

that submits a responsive proposal in response to a request for

detailed proposals under Subsection (f) a stipulated amount in

exchange for the work product contained in that proposal.AAA

stipulated amount must be stated in the request for proposals and

may not exceed the value of any work product contained in the

proposal that can, as determined by the department, be used by the

department in the performance of its functions.AAThe use by the

department of any design element contained in an unsuccessful

proposal is at the sole risk and discretion of the department and

does not confer liability on the recipient of the stipulated amount

under this section.AAAfter payment of the stipulated amount:

(1)AAthe department owns with the unsuccessful proposer

jointly the rights to, and may make use of any work product

contained in, the proposal, including the technologies,

techniques, methods, processes, ideas, and information contained

in the project design; and

(2)AAthe use by the unsuccessful proposer of any

portion of the work product contained in the proposal is at the sole

risk of the unsuccessful proposer and does not confer liability on

the department.

(n)AAThe department may prescribe the general form of a

comprehensive development agreement and may include any matter the

department considers advantageous to the department.AAThe

department and the private entity shall finalize the specific terms

of a comprehensive development agreement.

(o)AASubchapter A of this chapter and Chapter 2254,

Government Code, do not apply to a comprehensive development

agreement entered into under this subchapter.

(p)AAAll teaming agreements and subconsultant agreements

must be executed and provided to the department before the

execution of the comprehensive development agreement.


June 14, 2005.

Amended by:


eff. June 11, 2007.


32





eff. June 11, 2007.



Sec. 223.204.AACONFIDENTIALITY OF INFORMATION. (a) To

encourage private entities to submit proposals under this

subchapter, the following information is confidential, is not

subject to disclosure, inspection, or copying under Chapter 552,

Government Code, and is not subject to disclosure, discovery,

subpoena, or other means of legal compulsion for its release until a

final contract for a proposed project is entered into:

(1)AAall or part of a proposal that is submitted by a

private entity for a comprehensive development agreement, except

information provided under Sections 223.203(b)(1) and (2), unless

the private entity consents to the disclosure of the information;

(2)AAsupplemental information or material submitted by

a private entity in connection with a proposal for a comprehensive

development agreement, unless the private entity consents to the

disclosure of the information or material; and

(3)AAinformation created or collected by the department

or its agent during consideration of a proposal for a comprehensive

development agreement.

(b)AAAfter the department completes its final ranking of

proposals under Section 223.203(h), the final rankings of each

proposal under each of the published criteria are not confidential.


June 14, 2005.

Sec. 223.205.AAPERFORMANCE AND PAYMENT SECURITY. (a)

Notwithstanding Section 223.006 and the requirements of Subchapter

B, Chapter 2253, Government Code, the department shall require a

private entity entering into a comprehensive development agreement

under this subchapter to provide a performance and payment bond or

an alternative form of security in an amount sufficient to:

(1)AAensure the proper performance of the agreement;

and

(2)AAprotect:

33








(A)AAthe department; and

(B)AApayment bond beneficiaries who have a direct

contractual relationship with the private entity or a subcontractor

of the private entity to supply labor or material.

(b)AAA performance and payment bond or alternative form of

security shall be in an amount equal to the cost of constructing or

maintaining the project.

(c)AAIf the department determines that it is impracticable

for a private entity to provide security in the amount described by

Subsection (b), the department shall set the amount of the bonds or

the alternative forms of security.

(d)AAA payment or performance bond or alternative form of

security is not required for the portion of an agreement that

includes only design or planning services, the performance of

preliminary studies, or the acquisition of real property.

(e)AAThe amount of the payment security must not be less than

the amount of the performance security.

(f)AAIn addition to or instead of a performance and payment

bond, the department may require one or more of the following

alternative forms of security:

(1)AAa cashier’s check drawn on a financial entity

specified by the department;

(2)AAa United States bond or note;

(3)AAan irrevocable bank letter of credit; or

(4)AAany other form of security determined suitable by

the department.

(g)AAThe department by rule shall prescribe requirements for

an alternative form of security provided under this section.


June 14, 2005.

Sec. 223.206.AAOWNERSHIP OF HIGHWAY. (a) A state highway or

another facility described by Section 223.201(a) that is the

subject of a comprehensive development agreement with a private

entity, including the facilities acquired or constructed on the

project, is public property and shall be owned by the department.

(b)AANotwithstanding Subsection (a), the department may

34



enter into an agreement that provides for the lease of

rights-of-way, the granting of easements, the issuance of

franchises, licenses, or permits, or any lawful uses to enable a

private entity to construct, operate, and maintain a project,

including supplemental facilities.AAAt the termination of the

agreement, the highway or other facilities are to be in a state of

proper maintenance as determined by the department and shall be

returned to the department in satisfactory condition at no further

cost.

(c)AAA highway asset or toll project that is used or leased by

a private entity under Section 202.052 or 228.053 for a commercial

purpose is not exempt from ad valorem taxation and is subject to

local zoning regulations and building standards.

(d)AAThe department may not enter into a comprehensive

development agreement with a private entity under this subchapter

that provides for the lease, license, or other use of rights-of-way

or related property by the private entity for the purpose of

constructing, operating, or maintaining an ancillary facility that

is used for commercial purposes.


June 14, 2005.

Amended by:


June 17, 2011.

Sec. 223.207.AALIABILITY FOR PRIVATE OBLIGATIONS. The

department may not incur a financial obligation for a private

entity that designs, develops, finances, constructs, maintains, or

operates a state highway or other facility under this

subchapter.AAThe state or a political subdivision of the state is

not liable for any financial or other obligations of a project

solely because a private entity constructs, finances, or operates

any part of the project.


June 14, 2005.

Sec. 223.208.AATERMS OF PRIVATE PARTICIPATION. (a) The

35






department shall negotiate the terms of private participation under

this subchapter, including:

(1)AAmethods to determine the applicable cost, profit,

and project distribution among the private participants and the

department;

(2)AAreasonable methods to determine and classify toll

rates and responsibility for the setting of tolls;

(3)AAacceptable safety and policing standards; and

(4)AAother applicable professional, consulting,

construction, operation, and maintenance standards, expenses, and

costs.

(b)AAA comprehensive development agreement entered into

under this subchapter may include any provision that the department

considers appropriate, including provisions:

(1)AAproviding for the purchase by the department,

under terms and conditions agreed to by the parties, of the interest

of a private participant in the comprehensive development agreement

and related property, including any interest in a highway or other

facility designed, developed, financed, constructed, operated, or

maintained under the comprehensive development agreement;

(2)AAestablishing the purchase price for the interest

of a private participant in the comprehensive development agreement

and related property, which price may be determined in accordance

with the methodology established by the parties in the

comprehensive development agreement;

(3)AAproviding for the payment of obligations incurred

pursuant to the comprehensive development agreement, including any

obligation to pay the purchase price for the interest of a private

participant in the comprehensive development agreement, from any

lawfully available source, including securing such obligations by a

pledge of revenues of the commission or the department derived from

the applicable project, which pledge shall have such priority as

the department may establish;

(4)AApermitting the private participant to pledge its

rights under the comprehensive development agreement;

(5)AAconcerning the private participant ’s right to

operate and collect revenue from the project; and

36

(6)AArestricting the right of the commission or the

department to terminate the private participant ’s right to operate

and collect revenue from the project unless and until any

applicable termination payments have been made.

(c)AAThe department may enter into a comprehensive

development agreement under this subchapter with a private

participant only if the project is identified in the department’s

unified transportation program or is located on a transportation

corridor identified in the statewide transportation plan.

(d)AASection 223.207 does not apply to the obligations of the

department under a comprehensive development agreement.

(e)AANotwithstanding anything in Section 201.112 or other

law to the contrary, and subject to compliance with the dispute

resolution procedures set out in the comprehensive development

agreement, an obligation of the commission or the department under

a comprehensive development agreement entered into under this

subchapter to make or secure payments to a person because of the

termination of the agreement, including the purchase of the

interest of a private participant or other investor in a project,

may be enforced by mandamus against the commission, the department,

and the comptroller in a district court of Travis County, and the

sovereign immunity of the state is waived for that purpose.AAThe

district courts of Travis County shall have exclusive jurisdiction

and venue over and to determine and adjudicate all issues necessary

to adjudicate any action brought under this subsection.AAThe remedy

provided by this subsection is in addition to any legal and

equitable remedies that may be available to a party to a

comprehensive development agreement.

(f)AAA comprehensive development agreement entered into

under this subchapter and any obligations incurred, issued, or owed

under the agreement does not constitute a state security under

Chapter 1231, Government Code.

(g)AAIf the department enters into a comprehensive

development agreement with a private participant that includes the

collection by the private participant of tolls for the use of a toll

project, the private participant shall submit to the department for

approval:

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(1)AAthe methodology for:

(A)AAthe setting of tolls; and

(B)AAincreasing the amount of the tolls;

(2)AAa plan outlining methods the private participant

will use to collect the tolls, including:

(A)AAany charge to be imposed as a penalty for late

payment of a toll; and

(B)AAany charge to be imposed to recover the cost

of collecting a delinquent toll; and

(3)AAany proposed change in an approved methodology for

the setting of a toll or a plan for collecting the toll.

(h)AAA comprehensive development agreement with a private

participant that includes the collection by the private participant

of tolls for the use of a toll project may be for a term not longer

than 50 years from the later of the date of final acceptance of the

project or the start of revenue operations by the private

participant, not to exceed a total term of 52 years.AAThe

comprehensive development agreement must contain an explicit

mechanism for setting the price for the purchase by the department

of the interest of the private participant in the comprehensive

development agreement and related property, including any interest

in a highway or other facility designed, developed, financed,

constructed, operated, or maintained under the agreement.


June 14, 2005.

Amended by:


eff. June 11, 2007.


June 17, 2011.

Sec. 223.209.AARULES, PROCEDURES, AND GUIDELINES GOVERNING

SELECTION AND NEGOTIATING PROCESS. (a) The commission shall adopt

rules, procedures, and guidelines governing selection of a

developer for a comprehensive development agreement and

negotiations to promote fairness, obtain private participants in

projects, and promote confidence among those participants.AAThe

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rules must contain criteria relating to the qualifications of the

participants and the award of the contracts.

(b)AAThe department shall have up-to-date procedures for

participation in negotiations under this subchapter.

(c)AAThe department has exclusive judgment to determine the

terms of an agreement.


June 14, 2005.

SUBCHAPTER F. DESIGN-BUILD CONTRACTS

Sec. 223.241.AADEFINITIONS.AAIn this subchapter:

(1)AA"Design-build contractor" means a partnership,

corporation, or other legal entity or team that includes an

engineering firm and a construction contractor qualified to engage

in the construction of highway projects in this state.

(2)AA"Design-build method" means a project delivery

method by which an entity contracts with a single entity to provide

both design and construction services for the construction,

rehabilitation, alteration, or repair of a facility.

(3)AA"Highway project" means:

(A)AAa single highway facility between two defined

points in a corridor; or

(B)AAtwo or more contiguous highway facilities.



Amended by:


June 3, 2015.

Sec. 223.242.AASCOPE OF AND LIMITATIONS ON CONTRACTS.

(a)AANotwithstanding the requirements of Subchapter A and Chapter

2254, Government Code, the department may use the design-build

method for the design, construction, expansion, extension, related

capital maintenance, rehabilitation, alteration, or repair of a

highway project.

(b)AAA design-build contract under this subchapter may not

39





grant to a private entity:

(1)AAa leasehold interest in the highway project; or

(2)AAthe right to operate or retain revenue from the

operation of a toll project.

(b-1)AAA design-build contract under this subchapter may

include a maintenance agreement requiring a design-build

contractor to maintain a project for an initial term of not longer

than five years. The maintenance agreement may authorize the

department, in its sole discretion, to exercise options extending

the term of the maintenance agreement for additional periods beyond

the initial maintenance term with each additional period being not

longer than five years. The department shall obtain pricing for the

maintenance work for each maintenance term.AAThe department may

require separate pricing for the maintenance work to be performed

for each year of a maintenance term.

(c)AAIn using the design-build method and in entering into a

contract for the services of a design-build contractor, the

department and the design-build contractor shall follow the

procedures and requirements of this subchapter.

(d)AAThe department may enter into a design-build contract

for a highway project with a construction cost estimate of $150

million or more to the department.

(d-1)AAThe department may not enter into more than six

contracts under this section in each state fiscal biennium.

(e)AAMoney disbursed by the department to pay engineering

costs for the design of a project incurred by the design-build

contractor under a design-build contract may not be included in the

amounts under Section 223.041:

(1)AArequired to be spent in a state fiscal biennium for

engineering-related services; or

(2)AAappropriated in Strategy A.1.1,

Plan/Design/Manage or Strategy A.1.2, Contracted Planning and

Design of the General Appropriations Act.

(f)AAThe department shall not use the design-build method for

the construction, expansion, extension, rehabilitation,

alteration, or repair of a highway project if the project is

substantially designed, to the extent described by Section

40


223.246(a)(5), by the department or another entity other than the

design-build contractor.

(g)AAThe department shall not include more than one highway

project in a design-build contract.



Amended by:


June 3, 2015.


September 1, 2019.

Sec. 223.243.AAUSE OF ENGINEER OR ENGINEERING FIRM. (a)AATo

act as the department ’s representative, independent of a

design-build contractor, for the procurement process and for the

duration of the work on a highway project, the department shall

select or designate:

(1)AAan engineer;

(2)AAa qualified firm, selected in accordance with

Section 2254.004, Government Code, who is independent of the

design-build contractor; or

(3)AAa general engineering consultant that was

previously selected by the department and is selected or designated

in accordance with Section 2254.004, Government Code.

(b)AAThe selected or designated engineer or firm has full

responsibility for complying with Chapter 1001, Occupations Code.



Sec. 223.244.AAOTHER PROFESSIONAL SERVICES. (a)AAThe

department shall provide or contract for, independently of the

design-build contractor, the following services as necessary for

the acceptance of the highway project by the department:

(1)AAinspection services;

(2)AAconstruction materials engineering and testing;

and

(3)AAverification testing services.

41







http://www.statutes.legis.state.tx.us/GetStatute.aspx?Code=OC&Value=1001


(b)AAThe department shall ensure that the engineering

services contracted for under this section are selected based on

demonstrated competence and qualifications.

(c)AAThis section does not preclude a design-build

contractor from providing construction quality assurance and

quality control under a design-build contract.



Sec. 223.245.AAREQUEST FOR QUALIFICATIONS. (a)AAFor any

highway project to be delivered through the design-build method,

the department must prepare and issue a request for

qualifications.AAA request for qualifications must include:

(1)AAinformation regarding the proposed project’s

location, scope, and limits;

(2)AAinformation regarding funding that may be

available for the project;

(3)AAcriteria that will be used to evaluate the

qualifications statements, which must include a proposer’s

qualifications, experience, technical competence, and ability to

develop the project;

(4)AAthe relative weight to be given to the criteria;

and

(5)AAthe deadline by which qualifications statements

must be received by the department.

(b)AAThe department shall publish notice advertising the

issuance of a request for qualifications in the Texas Register and

on the department ’s Internet website.

(c)AAThe department shall evaluate each qualifications

statement received in response to a request for qualifications

based on the criteria identified in the request.AAThe department

may interview responding proposers.AABased on the department’s

evaluation of qualifications statements and interviews, if any, the

department shall qualify or short-list proposers to submit

proposals.

(d)AAThe department shall qualify or short-list at least two

private entities to submit proposals under Section 223.246, but may

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not qualify or short-list more private entities than the number of

private entities designated on the request for qualifications.

(e)AAThe department may withdraw a request for

qualifications or request for proposals at any time.



Sec. 223.246.AAREQUEST FOR PROPOSALS. (a)AAThe department

shall issue a request for proposals to proposers short-listed under

Section 223.245.AAA request for proposals must include:

(1)AAinformation on the overall project goals;

(2)AApublicly available cost estimates for the

design-build portion of the project;

(3)AAmaterials specifications;

(4)AAspecial material requirements;

(5)AAa design approximately 30 percent complete;

(6)AAknown utilities, provided that the department is

not required to undertake an effort to locate utilities;

(7)AAquality assurance and quality control

requirements;

(8)AAthe location of relevant structures;

(9)AAnotice of any rules or goals adopted by the

department relating to awarding contracts to disadvantaged

business enterprises or small business enterprises;

(10)AAavailable geotechnical or other information

related to the project;

(11)AAthe status of any environmental review of the

project;

(12)AAdetailed instructions for preparing the

technical proposal required under Subsection (d), including a

description of the form and level of completeness of drawings

expected;

(13)AAthe relative weighting of the technical and cost

proposals required under Subsection (d) and the formula by which

the proposals will be evaluated and ranked; and

(14)AAthe criteria to be used in evaluating the

technical proposals, and the relative weighting of those criteria.

43



(b)AAThe formula used to evaluate proposals under Subsection

(a)(13) must allocate at least 70 percent of the weighting to the

cost proposal.

(c)AAA request for proposals must also include a general form

of the design-build contract that the department proposes and that

may be modified as a result of negotiations prior to contract

execution.

(d)AAEach response to a request for proposals must include a

sealed technical proposal and a separate sealed cost proposal

submitted to the department by the date specified in the request for

proposals.

(e)AAThe technical proposal must address:

(1)AAthe proposer ’s qualifications and demonstrated

technical competence, unless that information was submitted to the

department and evaluated by the department under Section 223.245;

(2)AAthe feasibility of developing the project as

proposed, including identification of anticipated problems;

(3)AAthe proposed solutions to anticipated problems;

(4)AAthe ability of the proposer to meet schedules;

(5)AAthe conceptual engineering design proposed; and

(6)AAany other information requested by the department.

(f)AAThe department may provide for the submission of

alternative technical concepts by a proposer.AAIf the department

provides for the submission of alternative technical concepts, the

department must prescribe a process for notifying a proposer

whether the proposer ’s alternative technical concepts are approved

for inclusion in a technical proposal.

(g)AAThe cost proposal must include:

(1)AAthe cost of delivering the project; and

(2)AAthe estimated number of days required to complete

the project.

(h)AAA response to a request for proposals shall be due not

later than the 180th day after the final request for proposals is

issued by the department.AAThis subsection does not preclude the

release by the department of a draft request for proposals for

purposes of receiving input from short-listed proposers.

(i)AAThe department shall first open, evaluate, and score

44


each responsive technical proposal submitted on the basis of the

criteria described in the request for proposals and assign points

on the basis of the weighting specified in the request for

proposals.AAThe department may reject as nonresponsive any

proposer that makes a significant change to the composition of its

design-build team as initially submitted that was not approved by

the department as provided in the request for proposals.AAThe

department shall subsequently open, evaluate, and score the cost

proposals from proposers that submitted a responsive technical

proposal and assign points on the basis of the weighting specified

in the request for proposals.AAThe department shall rank the

proposers in accordance with the formula provided in the request

for proposals.

(j)AAIf the department receives only one response to a

request for proposals, an independent bid evaluation by the

department must confirm and validate that:

(1)AAthe project procurement delivered value for the

public investment; and

(2)AAno anticompetitive practices were involved in the

procurement.



Amended by:


September 1, 2019.

Sec. 223.247.AANEGOTIATION. (a)AAAfter ranking the

proposers under Section 223.246(i), the department shall first

attempt to negotiate a contract with the highest-ranked

proposer.AAThe department may include in the negotiations

alternative technical concepts proposed by other proposers,

subject to Section 223.249.

(b)AAIf the department is unable to negotiate a satisfactory

contract with the highest-ranked proposer, the department shall,

formally and in writing, end all negotiations with that proposer

and proceed to negotiate with the next proposer in the order of the

selection ranking until a contract is reached or negotiations with

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all ranked proposers end.



Sec. 223.2475.AACHANGES TO DESIGN-BUILD TEAM. (a)AAA

design-build contractor selected for a contract may not make

changes to companies or entities identified as part of the

design-build team in a response to a request for proposals unless an

identified company or entity:

(1)AAis no longer in business, is unable to fulfill its

legal, financial, or business obligations, or can no longer meet

the terms of the teaming agreement proposed for the project with the

design-build contractor;

(2)AAvoluntarily removes itself from the team;

(3)AAfails to provide a sufficient number of qualified

personnel to fulfill the duties identified during the proposal

stage; or

(4)AAfails to negotiate in good faith in a timely manner

in accordance with provisions established in the teaming agreement

proposed for the project.

(b)AAIf the design-build contractor makes design-build team

changes in violation of Subsection (a), any cost savings resulting

from the changes accrue to the department and not to the

design-build contractor.

Added by Acts 2019, 86th Leg., R.S., Ch. 773 (H.B. 1542), Sec. 1,


Sec. 223.248.AAASSUMPTION OF RISKS AND COSTS. (a)AAExcept as

provided by Subsection (b), the department shall assume:

(1)AAall risks and costs associated with:

(A)AAchanges and modifications to the scope of the

project requested by the department;

(B)AAunknown or differing conditions at the site

of the project;

(C)AAapplicable environmental clearance and other

regulatory permitting necessary for the project; and

(D)AAnatural disasters and other force majeure

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events; and

(2)AAall costs associated with property acquisition,

other than costs associated with acquiring a temporary easement or

work area used for staging or constructing the project.

(b)AAA design-build contractor may assume some or all of the

risks or costs described by Subsection (a) if the terms of the

assumption are reflected in the final request for proposals,

including all supplements to the request.



Sec. 223.249.AASTIPEND AMOUNT FOR UNSUCCESSFUL PROPOSERS.

(a)AAThe department shall pay an unsuccessful proposer that submits

a responsive proposal a stipend for the work product contained in

the proposal that the department determines can be used by the

department in the performance of the department ’s functions.AAThe

stipend must be a minimum of twenty-five hundredths of one percent

of the contract amount and must be specified in the initial request

for proposals, but may not exceed the value of the work product

contained in the proposal that the department determines can be

used by the department in the performance of the department’s

functions.AAIf the department determines that the value of the work

product is less than the stipend amount, the department shall

provide the proposer with a detailed explanation of the valuation,

including the methodology and assumptions used by the department in

determining the value of the work product.AAAfter payment of the

stipend, the department may make use of any work product contained

in the unsuccessful proposal, including the techniques, methods,

processes, and information contained in the proposal.AAThe use by

the department of any design element contained in an unsuccessful

proposal is at the sole risk and discretion of the department and

does not confer liability on the recipient of the stipend under this

subsection.

(b)AAIn a request for proposals, the department shall provide

for the payment of a partial stipend in the event that a procurement

is terminated before the execution of a design-build contract.


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Sec. 223.250.AAPERFORMANCE OR PAYMENT BOND. (a)AAThe

department shall require a design-build contractor to provide:

(1)AAa performance and payment bond;

(2)AAan alternative form of security; or

(3)AAa combination of the forms of security described

by Subdivisions (1) and (2).

(b)AAExcept as provided by Subsection (c), a performance and

payment bond, alternative form of security, or combination of the

forms shall be in an amount equal to the cost of constructing or

maintaining the project.

(c)AAIf the department determines that it is impracticable

for a private entity to provide security in the amount described by

Subsection (b), the department shall set the amount of the

security.

(d)AAA performance and payment bond is not required for the

portion of a design-build contract under this section that includes

design services only.

(e)AAThe department may require one or more of the following

alternative forms of security:

(1)AAa cashier’s check drawn on a financial entity

specified by the department;

(2)AAa United States bond or note;

(3)AAan irrevocable bank letter of credit provided by a

bank meeting the requirements specified in the request for

proposals; or

(4)AAany other form of security determined suitable by

the department.

(f)AASection 223.006 of this code and Chapter 2253,

Government Code, do not apply to a bond or alternative form of

security required under this section.



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